Q&A session with our CEO: United Arab Emirates fighting Fraud and corruption

Middle east corruption is a threat to the world. The United Arab Emirates (UAE) is a land of complex extremes where fabulous wealth and supercars live right next to staggering poverty. This is generally a recipe for fraud and corruption. However UAE has been talking the right steps towards a fraud free future. This Financier Worldwide Q&A session with our CEO discusses United Arab Emirates role in fighting fraud and corruption. Read the answers to the following questions:

• To what extent have you seen a notable rise in the level f corporate fraud, bribery and corruption uncovered in United Arab Emirates in recent years?
• Have there been any legal and regulatory changes implemented in United Arab emirates  designed to combat fraud and corruption? What penalties do companies face for failure comply?
• Do regulators in United Arab Emirates have sufficient resources to enforce the law in this area? Are they making inroads in this area?
• If a company finds itself subject to a government investigation or dawn raid, how should it respond?
• and much more…

Q. To what extent have you seen a notable rise in the level of corporate fraud, bribery and corruption uncovered in United Arab Emirates (UAE) in recent years?

ANJUM: Some recent, high profile cases have affected companies and countries in the Middle East. Embraer’s bribery scandal, involving sales of its aircraft, included officials in Saudi Arabia, among others. Further, there have been suspicions of corruption surrounding the awarding of the 2022 FIFA World Cup to Qatar, suspicious which have been worsened by allegations of human rights abuses involving migrant workers. In general, however, it is still issues like data theft, e-commerce fraud, information security and other high tech threats that pose serious risks to organisations in the Middle East. We live in an increasingly connected world, so while anti-fraud laws and controls in one country may be robust, a company might find itself doing business abroad in a location where laws and enforcement are more lax, and risk is heightened.

Q. Have there been any legal and regulatory changes implemented in UAE designed to combat fraud and corruption? What penalties do companies face for failure to comply?

ANJUM: the UAE has a strong reputation for being tough on corruption, and a new law enhances this stance. The recently approved, and highly anticipated, Anti-Commercial Fraud Law will strengthen protections of intellectual property rights (IPR) and will impose stricter penalties anon counterfeiters. For example, a fraud offence related to counterfeiting could now result in up to 2 years in prison, as well as a fine of up to Dh1m. Overall, corruption is still a low risk for companies operating in the UAE. Laws against corruption are enforced, and they cover bribery, facilitation payments, embezzlement and other types of fraud and abuse. However, when concerning the Middle East as a whole, there are indications that fraud and corruption are the rise, which means we must be ever vigilant in protecting investments throughout the region.

Q. In your opinion, do regulators in UAE have sufficient resources to enforce the law in this area and fight corruption? Are they making inroads in this area?

ANJUM: When considering the Middle East region, there can be no ignoring war-ravaged areas like Syria, Iraq, Libya and Yemen. It is an understatement to say that countries embroiled in conflicts and crisis usually do not have the resources or manpower to properly prevent and detect fraud. But according to Transparency international’s most recent  Corruption Perceptions Index, a few of the other more stable and affluent countries in the region are experiencing some difficulty preventing fraud, as well. Different factors can contribute to these struggles, be they politics, autocratic leadership, weak laws or judiciary bodies. However, the UAE still ranks as the least corrupt country in the Middle East, and other countries might take heed of the country’s Anti-Commercial Fraud Law and other existing laws, not to mention the UAE’s enforcement measures, as a possible model for future efforts.

Q. If a company finds itself subject to a government fraud and corruption investigation or dawn raid, how should it respond?

ANJUM: A company that finds itself in such as crisis should immediately cooperate with authorities and work quickly to gather the facts. What are the allegations? What is the scope of the investigation? Was the raid expected, or has the company been taken completely by surprise? In the early stages, it is crucial that the company engages in a good-faith effort to be transparent and cooperative. Of course, retaining legal counsel, is a must at this an every stage of an investigation, If an employee or employees have engaged in fraud, the company should support the fact-finding process and let justice run its course. Company leaders should also evaluate their internal controls and ensure that additional fraud or corruption is not occurring under the radar.

Q. What role are whistle-blowers playing in the fight against corporate fraud and corruption? How important is it to train staff to identify and report potentially fraudulent activity?

ANJUM: The statistics on fraud, such as in the Association of Certified Fraud Examiners Report to the Nation on Occupational Fraud & Abuse show that fraud is most often uncovered by tips, more so than audits, surveillance, account reconciliation, document examination and other methods. Accordingly, a company’s own employees are their first line of defence against fraud. But to encourage whistle blowing, two critical measures need to be in place. First, employee should be trained to identify the red flags of fraud, and to know what does, and what does not, constitute fraudulent behaviour. Second, a reporting mechanism should be in place; an anonymous system by which whistle-blowers can submit their tips without fear of retaliation or negative consequences.

Q. What advice can you offer to companies on conducting an internal investigation to follow up on suspicions of fraud or corruption?

ANJUM: In any situation where fraud is suspected, it is crucial that experts be brought in as quickly as possible to help unravel the facts of the case, if the company does not have anti-fraud professional among its staff, It is critical to remember that there are various laws, depending on your country or region, which govern the rules of gathering evidence and interviewing witnesses. Any evidence that is mishandled or collected improperly can negatively impact an investigation and hurt the chances of a resolution. If an investigation is bungled from the start, it is nearly impossible to then ‘wind it back’ and correct mistakes later. Also, if criminal behaviour is suspected, legal authorities should be quickly notified and provided with the company’s findings and reasons for the allegation.

Q. What general steps can companies take to proactively prevent corruption and fraud within their organisation?

ANJUM: Every organisation, large or small, should have a plan in place for preventing and detecting fraud. The first step is to communicate the organisation’s zero-tolerance stance against fraud. An ethical code of conduct, signed by every employee, can be effective in this regard. A fraud risk assessment should be conducted to find vulnerabilities. The company’s hiring policy should include pre- and post-employment background screening. Job responsibilities should include segregation of duties, so that no single employee has too much control over finances or assets. The company should conduct audits and encourage whistle-blowing with an anonymous reporting system. With a comprehensive fraud prevention system in place, business owners can sleep a little easier, knowing that their organisation has reduced risk and increased their ability to prevent and detect fraud.

Speak up – report any illegal, unethical, or improper behaviour

If you find yourself in an ethical dilemma or suspect inappropriate or illegal conduct, and you feel uncomfortable reporting through normal channels of communication, or wish to raise the issue anonymously, use CRI® Group’s Compliance Hotline. The Compliance Hotline is a secure and confidential reporting channel managed by an independent provider. When reporting a concern in good faith, you will be protected by CRI® Group’s Non-Retaliation Policy.

About CRI® Group

Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.

In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI® Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.

Meet our CEO

Zafar I. Anjum, is Group Chief Executive Officer of CRI® Group (www.crigroup.com), a global supplier of investigative, forensic accounting, business due diligence and employee background screening services for some of the world’s leading business organisations.  Headquartered in London (with significant presence throughout the region) and licensed by the Dubai International Financial Centre-DIFC, the Qatar Financial Center-QFC, and the Abu Dhabi Global Market-ADGM, CRI® Group safeguards businesses by establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. CRI® Group maintains offices in UAE, Pakistan, Qatar, Turkey, Singapore, Malaysia, Brazil, China, USA, and the United Kingdom.

Contact CRI® Group to learn more about its 3PRM-Certified™ third-party risk management strategy program and discover an effective and proactive approach to mitigating the risks associated with corruption, bribery, financial crimes and other dangerous risks posed by third-party partnerships.

CONTACT INFORMATION

Zafar Anjum, MSc, MS, CFE, CII, MICA, Int. Dip. (Fin. Crime) | CRI Group Chief Executive Officer

37th Floor, 1 Canada Square, Canary Wharf, London, E14 5AA United Kingdom

t: +44 207 8681415 | m: +44 7588 454959 | e: zanjum@crigroup.com

This Q&A article is based on a 2017 Financier Worldwide interview.

Since 2001, Financier Worldwide has provided valuable information on corporate finance and board-level business issues through its monthly magazine and exclusive website content. As a leading publisher of news and analysis on this dynamic global market, the organisation is recognised as a valued source of intelligence to the corporate, investment and advisory community. More from Financier Worldwide:

• Corporate resilience: managing third party risks, April 2013  |  SPECIAL REPORT: MANAGING RISK 
• Contract fraud: is your organisation at risk?, February 2013  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION
• Fraud & Regulatory Enforcement 2013, April 2013  |  FRAUD & CORRUPTION

Download 2018 annual reviews by Mr. Zafar Anjum, CEO, and Ms. Fatima Farrukh, Compliance professional at CRI® Group.

• Click here to download the review of UAE (Mr. Zafar Anjum, CEO at CRI® Group)
• Click here to download the review of UK (Mr. Zafar Anjum, CEO at CRI® Group)
• Click here to download the review of Pakistan (Ms. Fatima Farrukh, 2018 Compliance professional at CRI® Group)